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App Store Lessons: Taxes and App Store Earnings

iTunes treats App Store earnings as commissions, not royalties. This means you …

If you're waiting for Apple to send you a 1099 for the 2008 tax season, well, you shouldn't be. App Store payments are not reported to the IRS and you will not be receiving a 1099 in the mail from anyone. App Store payments are treated as sales commissions rather than royalties, according to the iTunes Royalty department of Apple. You are responsible for reporting your earnings and filing your own payments for any sums you have earned from App Store.

Many developers had erroneously assumed that since they had to fill out tax forms and submit their social security numbers/EIN as part of the App Store contract, Apple would be sending some kind of tax documentation at the end of the year. Instead, you will probably want to download your financial reports from iTunes Connect and use those figures for reporting your earnings. These figures are available by world region as month-by-month reports in a text-based, tab-delimited format.

Ars has contacted Apple for a further statement about App Store earnings and developer responsibilities but has yet to hear back with any details.